Today marks 13 trading days since the 1219.80 level on the S&P was reached. It may mean something, it may mean nothing. However, there have been THREE "corrections" since the March '09 lows that went as low as a .09 (fibonacci extension)... They were:

- Last June-July (where the extension hit precisely that number, 956-879)...
- January - Feb (where 1150 retraced to 1044)...
- Now (while the "flash crash" of last Thursday printed down to 1065), the algos caught it within a day, and Fridays trading finished the week on PRECISELY .09, [S&P 1,100]...

Both the June/July, and Jan/Feb "corrections" lasted FIBO DAYS (from high to low). The former lasted 21 days, the latter, 13 days. There was another "minor" correction (back in Oct/Nov) that lasted 8 days...

From the most recent high [1219.8], the "Flash Crash" hit on the 8th day... Moreover, today's trading will be the 5th day since the FLASH CRASH (making it DAY 13)...

Since these patterns have repeated themselves, they bear watching. It would make quite a bit of sense to see trading make an attempt to "disavow" any wave completion within todays stick... But if all goes to hell, it could go to hell quite quickly...

It doesn't matter whether or not anyone "believes" in the voodoo of FIBONACCI sequences... If someone shouts "fire" in a crowded theatre, and even only a few people get scared and start to stampede, then the odds that others will follow starts to grow exponentially...

So enjoy yourselves with DAY 13, on May 13...

Houston... Do we have a problem? Or not? (& doesn't it kind of make you wish that some of THESE GUYS were the ones who could solve the problems with out financial system)?

"Spending simply must go down....no matter what happens on the income side of things."

See that's the problem right there (as reflected in TAX RECEIPTS)...

You're right... People ARE NOT STUPID (except when it comes to voting for politicians)...

PEOPLE are spending less... Instead - tthe GOVERNMENT is spending more... If the CEO of the USA had ever run a Dairy Queen before, he would know that if there are marginally less customers at your DQ stand, the "solution" to the problem is NOT to order a new truckload of ice cream and give out FREE SAMPLES (thereby going from "marginally less" paying customers - to NONE, and raising your input costs in the process)...

my husband emailed me last night that what he is seeing there (kauai) and in talks with friends, is that things are much more difficult than most people know.. people have run out of money (and credit.)

"Amid fears over the strength of nearly every major currency, Abu Dhabi’s top hotel has come up with a new type of ATM for their most risk-averse guests. The Emirates Palace is giving those staying there the chance to withdraw gold from the world first ever gold dispenser."

pretty wild-

and also- I would like to know how I got dragged into a shouting match between thor and b22-

"It seems that despite recent volatility, investors are still keeping one eye on fundamentals. And with strong corporate earnings, solid data from the US jobs market and a spate of mergers and acquisitions there are still reasons to buy."- CNBC

dude, I was just making a joke. thor likes to play this little game where he calls me a child and makes a big deal about what an adult he is, this is really funny to me because:

1. he's like 7 or 8 years older than me2. he loves to call me names, you know, like "pussy" or "13 year old girl" when he does this, which is very mature.

I made a post here yesterday about BR's "typical recovery" charts yesterday. My post basically said: (it was english so I'll translate for Thor since he's reading this)

BR is now calling the "recovery", "typical"....Am I crazy or is he crazy because it looks to me to be anything but typical.

thor thought he would play blog police yesterday, why, I don't know, I said nothing to him and directed no comments toward him.

he then went on to claim that "adults" when they have a problem with someone, they confront them directly about it.

i found this laughable for two reasons

1. In the real world, people more often than not do the exact opposite and 2. In blog land (where we all use anonymous screen names btw) I find no reason that I'm required to tell a pundit directly that I disagree with them or think something they are saying is crazy. That was the whole point of my post to you last night, it was supposed to be a joke.

anyway, on to more important topics, I posted a link of that Gold ATM last night in the bottom thread. Not sure what to make of it, it looks both extreme in sentiment but also similar to things we saw in the middle of the RE bubble.

There is, in my opinion a rapidly growing very ill will against the government and this year's policies. I posted this because I read the comments after the story. They are Vitriolic in the extreme. There are a lot of very angry taxpayers out there, and the election results so far, I think, simply show that this is building for November...

LISBON, May 13 (Reuters) - Portugal will deepen budget deficit cuts by imposing extraordinary income taxes of up to 1.5 percent, hiking value-added tax by 1 percentage point and imposing a 2.5 percent tax on large companies and banks' profits.

...It would appear the PIGS are trying to slowly back away from the trough....perhaps they see farmer McDonald sharpening his knife...

do you all remember when Andy discussed ABX over at his blog? If you don't remember Andy made a point to highlight that they had taken all their gold hedges off, the direction of the price of gold could only go up. Of course this ended up hurting sharholders as they bought back the short hedgebook. Andy, at the time, drew a parallel between them and how the airlines had made terrible oil bets in the past if I remember correctly.

Well, Peter Munk from ABX is back out there talking about gold (yes, it's going higher), and this time, of all places, he's on Kudlow!

I don't find any video clip but his visit was under the heading "The Gold Rush"

thanks for the business thoughts from your husband. Anecdotal accounts from my clients say that the economy is gangbusters right now, lol.

couple examples I work with a large staffing company CEO in philly, they do job placement primarily for the financial sector and BAC just happens to be a very large client. Temporary hires is better than they have ever seen in their 14 year history. Perm hires,...crickets. the CEO told me, his exact words "this is the most optimistic the banks have been in years" he tells me that they are all confident that they will be making perm. hires very soon and that the economy is on solid ground. this seems to go well with what MW said she was hearing from the banks in that Bloom interview about banker confidence.

I met with two people yesterday that work at DD, both are slammed with work. .

My small business owners otoh, all are having a lot of trouble.

Another thing that is starting to happen is people are bringing up to me in meetings "are a lot of people staying in their home without paying, we know a few people doing it", this is coming up all the time lately.

I appealed to his REASON... I said... "Amen, I could pay you a lot of money here, but both of us know that the money you'd be getting would be denominated in some fiat currency that will eventually be WORTHLESS... So what's the point in paying you at all?"...

sorry man about the links, I try my best to read every single comment on here but sometimes I just miss a few. it's kind of funny though that I find the same links as you on a pretty regular basis and post them after you do.

C, hard to say, I had a few orders in yesterday that didn't get filled. I'm not sure what we do here, everyone has the range 1170-1180, lot of people looking for 1173-1174 and then a re-test of the thursday low with a large bounce to new highs after.

You might be set up really well for a short term trade if that's how the direction plays.

I know you know this, but stock prices globally are held up here by one thing only...the liquidity provided by the FED. I would bet the Ponderosa that once the FED has to start tightening, that equities will fall. As Greenspan and Bernanke know, when you bring rates down to these levels, people take risks in equities rather than parking it in cash. Hell, every single one of us knows this basic truth...

If the 80 year old grandma gets talked into equities here because she can't live on cash's interest, then may Bernanke reap a just reward..

The weekly ICI number for long-term domestic mutual fund flows is out, and not surprisingly, retail investors were bailing out in droves from the stock market even before the massive flash crash of May 6. In fact, in the week ended May 5, retail investors had pulled a massive $2.235 billion out of the market, after the S&P had dropped a mere 5% or so from the prior week. We are positive that when the number for the current week comes out, the outflows will be stunning now that investors have no faith left in the rigged casino "capital markets."

well, if the small caps are the guide now we are going to new highs. You certainly now have to rule out an impulsive down count on r2000 because it broke a rule today....I keep in mind that its a secondary, and did odd things in 08 as well, but if the larger trend is still up then this is foreshadowing a move higher.

it's all part of socionomics, I think that 2003 policital forecast paper is free this week as well. People come together in bulls, they split apart in bears....teams for example have a harder time working together in negative social mood for this reason. Makes you consider all the plane crashes lately, or the plane that flew a few hours past its landing as it was rumored there was an argument going on in the cockpit.

. . .data put together by University of Chicago economist Richard Thaler and Yale professor Cade Massey . . .says that high-end draft choices are overvalued. Their great piece of data? In their first five years on the field, the odds that a higher pick will outperform the guy selected before him is just 52 percent.

Translation? Trade down for more picks to increase your chances of getting a better player.

Thursday's downgrades come after an industry-wide review led the rating agency to focus on "several U.S. life companies with significant exposure to commercial mortgages and CMBS relative to total invested assets or potential losses relative to capital under stress scenarios."

Also getting downgraded Thursday were mutual insurers NLV, which is part of National Life Insurance, and Pacific LifeCorp, which runs Pacific Mutual and Pacific Life. They and Principal are now rated triple-B, the second-lowest investment grade rating.

May 13 (Bloomberg) -- Spain and Portugal may be getting the message as they try to stop their economies from becoming infected by the Greek crisis.

Two days after other European governments told them to fix their budgets in return for a $1 trillion backstop, Spanish Prime Minister Jose Luis Rodriguez Zapatero yesterday announced the biggest round of budget reductions in 30 years. In Portugal, Finance Minister Fernando Teixeira dos Santos says he’s prepared for “social tension” after announcing additional cuts.

Policy makers are running the risk of union opposition as they force through austerity measures to convince investors they won’t join Greece in asking for an international bailout. While some economists said the European Union lifeline could take pressure off deficit-laden nations to act, it was enough to prompt Zapatero to announce a 5 percent cut in public wages.

“The fiscal announcements serve to suggest that the momentum now is indeed towards fiscal cuts,” said Erik Nielsen, chief European economist at Goldman Sachs Group Inc. in London. “What we have in the euro zone policy space right now is ‘moral suasion,’ not ‘‘moral hazard.’’’

The yield on Spain’s two-year government bond dropped 12 basis points to 1.861 percent yesterday after rising to a euro- era high of 3.143 percent last week. Portugal saw more demand at a sale of 1 billion euros ($1.3 billion) of 10-year bonds yesterday, with the debt priced to yield 4.52 percent, down 181 basis points from the May 7 high.

HighlightsBidding was aggressive for the month's 10-year note auction, an oversize $24 billion offering where coverage came in at a solid 2.96. Dealers are definitely losing business as direct bidding was very aggressive at 25 percent. Indirect bidding was also firm, at 42 percent, making for a combined 67 percent non-dealer takedown and far above the 52 percent average.

High yield of 3.548 percent was right at the 1:00 bid. A look back at the high yield in last month's auction offers a key yardstick for the sovereign-risk effect. The April yield was more than 35 basis points higher than now, this during a time when U.S. economic data have strengthened! Tomorrow the Treasury auctions $16 billion of 30-year bonds.

re: Mish, looks like that phrase "Oh SNAP" just took on a whole new meaning.

also, according to the Census Bureau the estimated US population as of 7/09 was 307,006,550. How can people talk about recovery with over 10% of the entire population on SNAP. Maybe it's just another case of "lag-time"?

I had caught some decent action on ANF puts, I'm thinking about buying more today and maybe I'll get a little lucky tomorrow. I hate that store so I enjoy betting against the stock, not to mention it's probably just a tad overvalued....

The US stock market should continue to move ahead even as the economy slows down, Goldman Sachs strategist Abby Joseph Cohen told CNBC. She related that as a term of her employment she had agreed to have a chip implanted in her head that sent her bullish signals all her adult life since that time.

"That chip has been in there so long, I wouldn't recognize difficult economic conditions now if they bit me in the ass." Ms. Cohen was quoted as saying.

We said last week, and again earlier this week, that the behaviour of the VIX index has recently been consistent with either the tail end of a bull market in equities or the onset of a new bear phase. Indeed, a cursory glance of the market internals — divergences, put-to-call ratio, investor sentiment, the new high-low list — strongly suggest that the first move above 1,200 on the S&P 500 in January resembled the break above 1,500 in July 2007, and the next blowoff move through 1,200, again in late April, looked like the double peak in October 2007.

The obvious question is: how can the bull market possibly be over considering that we enjoyed that amazing 405-point rally on the Dow just three days ago (Monday, May 10)? Wasn’t that an exclamation mark that the bull is alive and well?

Far from it. There have been no fewer than 16 such rallies of 400 points or more in the past, and 12 of them occurred during the brutal burst of the credit bubble and the other four took place around the tech wreck a decade ago.

In other words, the most valuable information contained in last week’s intense volatility, underscored by the 400-plus point bounce in the Dow, is that it’s time to take chips off the table and brace for the breakdown.

Actually, the very mental image of what an "asshat" might look like is quite troubling to me. Would it have a string, like some cowboy hats, so that if a big wind came up.......it wouldn't fly off? Could it be removed in a hurry............like if you went inside and how you would take a normal hat off? Could you get it in any color? Uh, any size....?

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Fictional Character Quote of the Day:

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- Andy Dufresne

"The Shawshank Redemption"

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This Blog's primary focus is on trading based upon technical analysis. It is run by "AmenRa" and "AndyT," quasi-anonymous traders who employ technical analysis to assess market conditions and trading opportunities. AmenRa utilizes 3LB techniques, Moving Averages and Fibonacci sequences. AndyT's analysis relies primarily on "Wave Theory" and Fibonacci sequences. The Comments Section is uncensored and open to the public. Please try and adhere to the "Blogger Policy."